Solution: Continue To Manage Risk
In our view, tactically participating in the uptrends that are occurring across many asset classes makes sense. However, we continue to monitor for the creaks that happen before the cracks, and will hold every investment until a downtrend begins significantly enough to trigger a stop-loss sell signal. Shrugging off risk is a gamble, not an investment strategy. Keeping the air bags in working order in your car is recommended, as is managing investment risk at all times, even when the environment appears benign.
Terri Spath is chief investment officer at Sierra Investment Management.